tv Studio 1.0 Bloomberg March 12, 2016 7:00am-7:31am EST
david: inside the magazine's news room in new york city. a device that tricks your cell phone into revealing its serial number. meet the play boy who will introduce you to marco rubio's sugar daddy. all that and more in this week's issue of "bloomberg businessweek." let's go meet the editor. i'm here with the editor of "bloomberg businessweek." in the global economic section of the magazine this week, a profile of the president of brazil in the midst of this scandalous corruption scandal that's widened and widened and widened even more. guest: that's some talk for months and months that he might be impeached.
it seems more and more like that could happen. she's embroiled in this huge scandal called car wash, which actually has to do with the national petroleum company and whether there were bribes to politicians for construction work, etc. and it's just getting crazy. and likely this weekend -- and there's likely this weekend to be a lot of protests. impeachment may happen. david: you look at a man you describe as marco rubio's sugar daddy. who is me? guest: he is very successful car dealership owner. he's had many lives. he was once the owner of the philadelphia eagles, and now sells very, very fancy cars. he's also been involved in the public life in miami for a very long time. he is rubio's biggest donor. $6 million. and they are very close to each other. you won't find like tons of favors back and forth.
a few, but not tons. and he likes rubio. obviously rubio isn't doing so well. but he's had this supporter behind him. david: the car wash scandal to the car dealer. in the opening remarks section you look at oklahoma's shale addiction. what is it? guest: oklahoma was really the heartland of the whole fracking history in this country. and fracking did huge things for oklahoma. which was always an oil state. but became a big oil and gas state, was revived. all these companies were suddenly incredibly rich. the economy was doing much, much better. and now of course gas and oil prices are way, way down. the industry is collapsing and oklahoma is really feeling the pain. it's contracted by something over 2% last year, during one quarter. and things are looking really grim. it's sort of your boom-bust cycle. you see it in sort of the history and landscape of this town.
david: so central to that story, a main character in that story, is who's on your cover this week. the founder, former c.e.o. of chesapeake energy, who met an untimely death. crashed his car in oklahoma a week or so ago. guest: we did a lot of oklahoma this issue. he was a larger than life character. we called him the shale king. he was not afraid of anything. he knew shale was going to be big. he bought up leases. he was really an incredible character. not afraid of debt. had huge amounts of debt. and, again, as gas prices dropped, his fortunes really collapsed. and he had been indicted the day before he crashed his car into a bridge. david: thank you so much. guest: thank you. david: "bloomberg businessweek" reporter spoke to carroll massar about his cover story. let's listen. >> he was a very smart, very shrewd guy with a great vision. dogged, hardworking. and at the same time a real fun guy. i never met him. but i wish i had. i think he would have been a fun guy to have a beer with.
he had many, many interests. and one of them was in making oklahoma city a better place to live and work. and i think many people from oklahoma city would say he succeeded in particular in that vision. carol: what's interesting too, there's a quote in your story or a passage in your story, where he had talked to bloomberg markets magazine and it said, if -- this is aubrey, if i wanted to always do the most popular thing, then i'd be a follower. the funny thing is i don't consider myself a gambler at all. that's somebody who just closes their eyes and roll the dice. we don't do that. he knew what he was doing all along the way. in terms of his career. >> he did and he didn't. he did a lot of buying of land. so he could drill on the land. sometimes he was pretty sure there was gas under that land. sometimes he didn't really know. and that's risky when it's $10 million for a bad well. but he was willing to take those risks because he believed there
would be a big surge in producing and in selling this gas. he was right about that. david: this week's focus on section looks into the state of surveillance. did you know there's a device which tricks mobile phones into giving up their serial numbers? this isn't science fiction. the device is called stingray. >> this story is about stingray, it's a brand name, any type of device that massacre aids as a cell phone tower and tricks your phone into giving up sometimes just its serial number and its location, and other times your phone conversations and your texts. carol: this is going on all the time or what? >> police departments around the country love it. the f.b.i. loves it. the military and intelligence company were the first to use it. and surprisingly it's getting cheaper and cheaper and more and more available. this story talks about the ways in which it one day might be something that everybody tries to have. carol: my neighbor could do this for not a lot of money.
this has to have regulators looking at it closely. are they? >> the regulatory community's in a bind here because the law enforcement community wants to use this and they want to keep using it, so it really can't be banned. they can't -- you can't sort of invent your way out of this problem and build technology to block it because the police like it too much. that means the criminals can use. it that means your neighbors can use it. it's about a network that may never be fully secure. carol: kind of timely when we consider we're talking so much about apple and their battle with the government in terms of privacy issues. that thing of security and privacy. this is a battle that's going to be going on for some time. >> totally. i think the government is so frustrated they can't get into the iphone because they've been so able to get into the network for so long. we have this phone that's very secure. and a network that's not secure at all. they would like the phone to be more like the network. carol: interesting. you do tell the story through an individual.
i don't want to give all of him away, but he sounds like a fascinating individual, a very smart individual. >> this guy is the most unlikeliest guy to become patient zero for the stingray. but there he was a few years ago. this tax fraud internet guy who is filing false tax returns and making a little bit of money. carol: went to jail. >> exactly. then from jail he tried to figure out how they caught him. that's how he learned that these stingrays were not just a military specialty item but they were the police's favorite toy. carol: you're right about all the work he did. why haven't we heard about stingrays before? >> there's been little bits of stuff that has names like cell site simulator. stingray's made by harris corporation. they also make something called the hail storm and they made something long ago called the trigger fish. so what you get are a lot of different reports and a lot of complaints from the aclu. but what you don't get is the sense of where this is going. and where it's going is cheaper,
more available, scarier. carol: right. then you've got police forces that want to be able to use this, correct? >> exactly. so the f.c.c. the iphone battle is about the government versus the private sector. the f.c.c. might want to block this. the military doesn't. david: just ahead, how to get hired by an activist investor. plus we'll introduce you to australia's ecommerce superstar and how amazon is trying to keep its employees from stealing on the job. if you want to work out with victoria's secret models, i have the gym for you. ♪
david: welcome back to "bloomberg businessweek." this week's markets and finance section, you can read about a new fad on wall street. catholic schools. among the big name donors writing checks for tens of millions of dollars to schools in boston, chicago and new york, merrill lynch, black stone group and drexel fund. there's still a price to pay. the wall streeters want a say in how the schools are run. in this week's technology section, the most infamous ecommerce pioneer, down under. i spoke with a reporter. >> australians were slow really to adopt internet retail the same way we do at least in the u.s. and this company started about 10 years ago and it was the first to go direct to these chinese had manufacturers. and ever since then it's been the most aggressive online
retailer. david: tell us about the namesake here. how was he able to get the idea and do it so quickly and well? >> he's an immigrant from belarus. he came to australia when he was 6 years old. one of these tales that you might hear about someone, he started all these businesses when he was growing up. he had a golf ball washing business, a car washing business. he did internet companies online. all through high school. and when he was about 23, he was a consultant and he'd made a bit of money and he wanted to buy a tv. and he went to try and buy a high-end one and it was $5,000 and he thought, that's a lot to spend. i wonder if i can get it cheaper. so he contacted the chinese manufacturer directly. and proposed that he would buy -- he pretended that he'd buy 100,000 units just to see what price he'd get. they said, we'll give them to you for $1,000 a pop. looked at the difference in the prices and decided, this is a market opportunity. i can become a tv salesman.
his mom started crying when he told her that. david: retailers often rely on consultants. they do a lot of research on what people are interested in buying. this is a company that has a very novel way of finding out what in fact consumers want. >> that's right. he makes fun of the idea of having focus groups and he calls people sheep who just take these surveys and say what they'd like, so they go on google, they use google analytics to really monitor what people are searching for. when 3-d tv's came out and tv makers were really pushing that, he went online to see if there was any interest for 3-d tv's and he saw there wasn't much from consumers at all. so they passed on making those products. he looks for specific models. it's not a company that carries everything under the sun. so this 42-inch with these features seems to be what people want, that's what we're going to make. he does the same thing on facebook and really out of the 200 employees that his company has, a huge number of them are running these analytics and doing all this data gathers all
the time. david: i'm going venture to guess i'm not the only guy who before reading your article hadn't typed in kogan.com. this is not something many americans know about. can we expect this company to make inroads into the u.s.? >> i was in australia and i hadn't heard of him either, then everywhere i went there was a kogan microwave and tv. i looked him up and saw the business was booming. to date they've tried to get into new zealand and they've done ok and they've tried to get into england and have done ok there. you can go to kogan.com even from the u.s. and order a product. as far as it becoming a household name, that is this guy's intent. that's what he wants to do over the next few years. i think it's going to be much harder for him to build this brand up outside of australia, where he had this advantage of being early to online retail. but that's what he wants to do. david: speaking of ecommerce, amazon has an innovative way of trying to prevent on-the-job theft. we spoke with a reporter. >> amazon is using anecdotes
about people that were fired allegedly for stealing to try to scare or dissuade other workers out of doing it. they've actually got flat screen tv's where you see a black silhouette with the word terminated over it. and then anecdotes about other people that lost their jobs for allegedly taking something they weren't supposed to. carol: is that because amazon is losing so much stuff? are employees taking a lot of merchandise? >> theft has been a long time concern for amazon. this is a company that has a high turnover, low pay work force. a lot of valuable, small stuff in their warehouses. so they've gone to great length to try to stop it. carol: there's some history at amazon about their tactics when it comes to employees. they can be pretty tough, can't they? >> sure. there's a case that went all the way to the supreme court regarding the wait times to go through security checks and, more dramatically, as my co-author on this story reported several years ago, there were situations like the one in 2010
in pennsylvania where workers said they were stuck in the freezing cold in their t-shirts and shorts for hours after a fire alarm got turned on just because the company was afraid that if people could go to their cars it might be covered to steal something. david: in this week's etc. section, the editor gives us a sneak peek at the five most exclusive gyms on the market. he spoke with carol. carol: there's always interesting trends going on in the fitness world but there's some very interesting things going on right now. >> right. people are always looking for a more exclusive experience at the gym. we found five that are going on this spring. for instance, actually one of the studios is the y-7 studio. they're doing yoga that then gets broken up with periods of hip-hop dancing. there's also a class called the skinny bitch collective. and you've got, in terms of names, we have another one called s-10. s-10 stands for sub-10% body fat. carol: getting all the body fat
down. very literal. there's one i think that was called model fit. and there's actually, if you go to class, you're going to find a lot of models in there. >> yes. the train who are started it claims that more victoria's secret models have taken his class than any other. there are several where you have to apply online and wait to hear back from them. thus the exclusivity of some of these. carol: that's what this is. it's being a little elitist. >> a little bit, absolutely. david: next up, afghanistan is looking for a few good bankers. plus brooks brothers discovers seniors may do it better. we'll tell but its factory in queens. also march madness is here and the madness has never been madder and the money has never been bigger. ♪
field of secular and even observant muslims. the story's crushing local and foreign rivals in turkey. it's almost four times the share of its closest competitor. 80% of the country's consumers have visited its stores. they know what turkish consumers want. another interesting story now in this week's companies and industries section. reporter profiles a pioneering brooks brothers plant. >> they have a factory out in long island city in new york and they make 1.4 million ties a year and half of their workers are 55 or older. carol: half of their workers? >> half. carol: we're in a world where everybody seems to be, you know, seeking out a lot of younger workers, they have found this to be valuable, to have those older workers with experience. >> absolutely. they couldn't operate, they say, without those older workers because they have certain skills that younger people don't have as much anymore. carol: that's why this is happening? >> that's right. but they also need younger people.
so it's a very multigenerational work force. carol: they use a little bit of both to make it work really, really well. it's interesting, i'm curious if other companies are picking up on that, where they're finding the experience of older workers make sense for them to kind of hold on to. >> they're going to have to. there are a lot of small businesses doing it but bigger ones are seeing the need because you have so many baby boomers retiring and they have gaps, so they need to hold -- some of those older people in there. carol: in terms of brooks brothers specifically, they have these older workers. they realize they're valuable. is there anything they're doing that's kind of interesting or innovative in terms of policies to help them out? >> yes. older workers need time off for health issues often. so they give everybody 1,400 minutes a year to use to go to doctors appointments, take care of ailing spouses. younger people can use it also to help their kids, do those sorts of things. they also have a flexibility, if you get sick. and they work a lot with ergonomics on the job. these people are working manually, they're using their
hand, they're moving around a lot. david: in this week's etc. section, a reporter exposes the sophisticated fantasy sports players who may use march madness as a way to take advantage of amateur players. >> we all are familiar with the brackets. office pools, you try to pick who is going to win in the 64 teams. carol: it's a big business. >> and it's mostly a black market. no one really knows, it's probably billions of dollars, but nobody really knows how much money because everybody just turns a blind eye to it. except for what happens in vegas, it's all off the books. we wanted to look at daily fantasy sports, which offers a product that looks kind of like, you know, you can go on, you can kind of guess which players are going to play well in the tournament. and maybe win a bunch of money. which is kind of the same idea. but as we looked into it, it turns out that unlike in your office pool, you're not going to luck into this by picking randomly or your favorite players or anything like that.
carol: there's professionals out there. you call them in the story the sharks. >> right. these are guys who play all year round. in particular, with college basketball, its own little funny subculture and community. there is in fact one guy who nobody knows who he is. goes by sox22. carol: not quite james bond but feels like that. >> even these very expert players that we spoke with say he dominates. if he's competing against you, he's going to take your money. he's out there. this is kind of the things you want to know if you decide, hey, i did a bracket, maybe i'll throw a couple of bucks in this fantasy game. this guy, he's waiting. carol: you need to remember that if you're playing, there are professionals out there who do it really, really well. >> especially if you go into the big money tournaments where everybody's allowed in. because that's where these guys really know how to work. david: so many other must-read pieces in this magazine this
week. in the markets and finance section, you look at activist investors and how many of them have hired women. give us the number. how many have they hired? it's surprising. guest: so, we told this story through a graphic which we love to do at the magazine. and we looked at how many board members had been appointed as a result of activist investors. since 2011 it was 108 and only five were women. so here's this group, they always say they're going to shake things up, make things better. not so much when it comes to women board members. for a moment we thought icon had. david: were you able to talk to them and get the sense of why this is the case? guest: we talked to one of dan's representatives who pointed out that they were involved in bringing marissa marr to yahoo!. i guess that meant they were
very familiar with women. david: there you go. also in the markets and finance section, you look at the bank of kabul in afghanistan. there's now a movement under way to get that to go private again. guest: the bank of kabul in afghanistan has had some very, very bad problems, including terrorist attacks, including its previous management basically told all its assets. the money just left the bank. and for a while the perpetrators were sort of out and about restaurants around town. but i think maybe now they're incarcerated, so now the government wants to sell the bank. and you can buy it for $20 million. it's not an easy bank to run. but it has many branches and if you have high hopes for the future of afghanistan, you may have high hopes for the future of this bank. david: any sense there are people interested in buying it? guest: they have gotten some interest. but they have not decided who's going to get it yet. david: thank you so much. thanks for joining us. "bloomberg businessweek" is
hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business.
you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. haslinda amin: hello, and welcome to "high flyers," a show that gives you a 360 view of asia. we meet a man who built one of -- his outspoken personality has meant a lot of controversy. he built australia's largest